RDC to revive Guatemala Railways

01 Aug 1997

ON JUNE 6 the government of Guatemala awarded a 50 year concession for the restoration, reopening and operation of the country's 914mm gauge national rail network to Compañía Desarrolladora Ferroviaria SA, an affiliate of Pittsburgh-based Railroad Development Corp. The government will receive 5% of gross income for the first two years and 10% a year thereafter.

The concession covers 813 km of track linking Guatemala City with the Atlantic at Puerto Barrios and Puerto San Tomas, the Pacific at Puerto Quetzal and Champerico and the Mexican border at Tecun Uman. There is also an abandoned branch from Zacapa to El Salvador. Ferrocarriles de Guatemala suspended freight services early in 1996, having dropped passenger trains in 1994.

RDC Chairman Henry Posner III says the company is 'under no illusions as to the difficulties facing Fegua. A substantial amount of capital will be invested before we can run the first train, and only then will we learn whether our assessment of the market was correct.' The concessionaire will initially spend US$10m on reviving the 300 km corridor from Guatemala City to the Atlantic, where the longer distance will enable more effective competition with road. A daily train will handle maritime containers; other potential traffic incudes fuel, cement, coffee, sugar, bananas, steel and scrap.

Phase 2 would revive the Pacific corridor from the Mexican border to Puerto Quetzal and Escuintla, after which the two routes would be connected by restoring the line west of Guatemala City which has been severed by serious washouts. Restoration of the link to El Salvador would follow. RDC hopes to harness the right-of-way for extra business, including pipelines, electricity transmission, and optic fibre communications links. It will also provide routes for a planned light rail network in Guatemala City.